UK cities launch new Magna Carta in drive for wholesale devolution

Britain’s major cities today launched a ‘Magna Carta for the 21st Century’ piling pressure on the next Government to approve wholesale devolution of powers and budgets from Whitehall.

The Core Cities group, which includes Birmingham, published what it termed a Modern Charter for Local Freedom setting out the reforms required to enable city regions to “improve lives and boost the economy”.

City leaders from Birmingham, Bristol, Cardiff, Glasgow, Leeds, Liverpool, Manchesrte, Newcastle, Nottingham and Sheffield are calling for the Queen’s Speech after the 2015 General Election to outline a Devolution Enabling Bill to allow a full range of city-based devolution.

The document, launched in the 800th anniversary year of the Magna Carta, sets out the basic principles on how powers can be devolved from national parliaments to drive prosperity, increase equality and strengthen democracy.

Echoing the original Magna Carta, it also calls for more control over taxes. Not to raise taxation levels – but to improve efficiency and make sure that money raised locally is spent locally by people who know their area.

It adds cities that want this, and meet set criteria, should be able to retain some property taxes and a percentage of income tax, to redesign everything from creating jobs to improving housing.

This report argues that devolved powers recently handed to Manchester and Sheffield as part of the Government’s northern powerhouse initiative should signal the beginning of a “differential and incremental process that can lead to full place-based devolution for all Core Cities in the UK”.

ResPublica says the Manchester and Sheffield deals “fall some way short of a whole-system place-based approach or Devo Max settlement”, describing the agreements as devolving separate silos of government spending, not integrated services across departments.

The report continues: “It is the full place-based devolution of all services and their integration which is the real social and economic prize that should be pursued by government, opposition and all the cities and regions of the United Kingdom.”

The report calls for urgent action to devolve more budgets and services, across departmental boundaries much further and much faster.

This would build on cross-party consensus about the need for devolution to cities and harness the existing political momentum to deliver immediate results, starting now with the roll-out of additional city devolution deals and bridging into the first 100 days of a new government.

Following the first Comprehensive Spending Review, cities would expect to agree five-year funding settlements for wider devolution packages to include:

Fully devolved local transport funds, decentralised bus and regional rail regulation to city regions, and earn-back deals for major local transport funding

Local control of all public spending on housing, including housing capital budgets and the ability to determine housing benefit levels and vary broad rental market areas

Devolved responsibilities and budgets for all employment and adult skills programmes to city regions. Devolved business support budgets and a proportion of UKTI budgets and functions to enable cities to take a more direct and proactive role to local trade and investment opportunities

Responsibility for strategic spatial planning at the sub-regional level to include powers to acquire and designate land use and housing development

Devolved responsibilities for energy efficiency and decentralisation of the energy market to create local energy companies

The removal of controls on levels of council tax.

Extension of full business rates flexibility and retention to local authorities

Freedoms to introduce new local taxes, including for example recycling and tourism/hotel room/traffic taxes, subject to local consultation with affected stakeholders.

The report proposes that over the course of the next Parliament, cities should begin to pilot ‘whole service’ devolution packages, and that further fiscal devolution should be progressed to include all property taxes and other locally determined taxes.

Core Cities chairman and leader of Manchester City Council Sir Richard Leese, said:

We believe it is only by devolving powers to cities and their regions that the UK can succeed on a global stage.

What is good enough for the UK’s nations should be good enough for our cities. We are proposing a revolutionary shift in power from our remote parliaments to local people who know their places best.

This is a low-risk, high impact strategy to secure a bolder, better national future that will create jobs, improve lives and renew our democracy.

ResPublica director Phillip Blond said:

Our report is radical because the issue of why Core Cities have not been fulfilling their potential needs a completely new perspective. It’s not enough to simply say we can tweak at the edges any more.

These cities deserve the fullest possible devolution of public spending and tax raising powers. We are now calling on all the parties to agree a timetable for devolution. It’s time we stopped the failures in these great regions and ensured their future growth and prosperity.